FTSE 100 on course for best year since the recovery from the financial crisis
The FTSE 100 is on course for its best year since the aftermath of the financial crisis – and its fifth-highest return of all time.With just two and a half trading sessions of 2025 to go, the blue-chip index has delivered total returns of 25 per cent, the best performance since the 27.3 per cent gain in 2009 when stocks bounced back from the collapse of Lehman Brothers and near-meltdown of the financial system.Analysts tipped the rally to continue with the Footsie closing in on the 10,000 mark for the first time. Dan Coatsworth, head of markets at AJ Bell, said: ‘The FTSE 100 has had precisely the ingredients desired by investors in a year full of political, trade and market uncertainty.‘You would have to go back to 2009 to see a better annual performance, and that was merely a bounce-back from a terrible showing the previous year when the credit crunch gripped the world.‘The year has been full of stories about sustained net outflows from UK funds, which is a surprise given the headline performance of the FTSE 100.’ Rolls-Royce has been one of the FTSE 100's top performing shares this year - up 104%The best-performing stock of the year is gold and silver miner Fresnillo, which has more than quadrupled in value on the back of soaring precious metal prices. Fellow gold miner Endeavour Mining is up 191 per cent.Defence groups Babcock International, Rolls-Royce and BAE Systems have made stellar gains – up 154 per cent, 104 per cent and 52 per cent respectively – as Europe re-arms.And banks have performed well as interest rates stayed higher than expected for longer than expected – boosting returns. Lloyds is up 86 per cent while NatWest gained 70 per cent and Barclays 113 per cent.Richard Hunter, head of markets at Interactive Investor, said: ‘After some years in the wilderness, the UK has seen a return to form with international investors warming to the stability and strength of the FTSE 100 in uncertain times.‘A large exposure to the three sectors of mining stocks, defence and banks has been the major driver for gains and representatives from these areas dominate the top ten performers. Given the relative valuation cheapness of the premier index, the story could well have further to run.’There has been a string of losers, however, with WPP crashing out of the FTSE 100 following a 58 per cent slump in its share price.The advertising industry has been hit as companies cut marketing budgets and use AI to create their own content.And it has been a grim year for Diageo, where shares are down 35 per cent, underlining the scale of the task facing chief executive Dave Lewis when he takes over on January 1.Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: ‘The FTSE 100 has put in a good show and it hasn’t been led by hype – it’s been powered by old-school earners: miners, banks and defence names.‘The UK outlook is improving at the margin: inflation is somewhat sticky but seemingly under control, and interest rates are on a downward path; that should slowly take the pressure off households and businesses.‘The flipside is that growth is still likely to be more grind than boom given tight public finances and a choppy global backdrop.’Garry White, at wealth manager Charles Stanley, said: ‘Sentiment appears to have shifted decisively – and London is back en vogue for global asset managers.’DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
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FTSE 100 on course for best year since the recovery from the financial crisis
